Supply chain – The COVID 19 pandemic has undoubtedly had the impact of its effect on the world. health and Economic indicators have been affected and all industries have been touched inside a way or another. One of the industries in which this was clearly obvious is the agriculture and food industry.
In 2019, the Dutch extension and food sector contributed 6.4 % to the yucky domestic item (CBS, 2020). Based on the FoodService Instituut, the foodservice industry in the Netherlands dropped € 7.1 billion within 2020. The hospitality industry lost 41.5 % of the turnover of its as show by ProcurementNation, while at the same time supermarkets increased their turnover with € 1.8 billion.
Disruptions of the food chain have big consequences for the Dutch economy as well as food security as lots of stakeholders are affected. Though it was clear to a lot of folks that there was a great impact at the end of this chain (e.g., hoarding in supermarkets, eateries closing) and also at the start of this chain (e.g., harvested potatoes not finding customers), you will find numerous actors inside the supply chain for which the effect is much less clear. It’s thus vital that you determine how effectively the food supply chain as a whole is armed to deal with disruptions. Researchers in the Operations Research and Logistics Group at Wageningen University as well as from Wageningen Economics Research, led by Professor Sander de Leeuw, studied the influences of the COVID 19 pandemic throughout the food supply chain. They based the examination of theirs on interviews with about 30 Dutch source chain actors.
Need within retail up, found food service down It is obvious and widely known that need in the foodservice stations went down on account of the closure of places, amongst others. In a few cases, sales for suppliers in the food service business thus fell to about 20 % of the first volume. As an adverse reaction, demand in the list channels went up and remained at a quality of aproximatelly 10-20 % greater than before the crisis began.
Products which had to come from abroad had their very own issues. With the change in need from foodservice to retail, the requirement for packaging changed considerably, More tin, cup and plastic was needed for use in consumer packaging. As more of this particular product packaging material concluded up in consumers’ houses rather than in places, the cardboard recycling system got disrupted also, causing shortages.
The shifts in demand have had a major effect on output activities. In certain instances, this even meant the full stop in output (e.g. inside the duck farming industry, which came to a standstill due to demand fall out in the foodservice sector). In other instances, a major portion of the personnel contracted corona (e.g. in the various meats processing industry), causing a closure of equipment.
Supply chain – Distribution pursuits were also affected. The beginning of the Corona crisis of China caused the flow of sea bins to slow down pretty shortly in 2020. This resulted in transport capacity that is restricted during the very first weeks of the problems, and costs that are high for container transport as a direct result. Truck transportation experienced various issues. To begin with, there were uncertainties about how transport would be handled at borders, which in the long run weren’t as strict as feared. The thing that was problematic in situations that are a large number of , nonetheless, was the availability of motorists.
The response to COVID-19 – supply chain resilience The source chain resilience analysis held by Prof. de Leeuw and Colleagues, was based on the overview of the primary elements of supply chain resilience:
Using this particular framework for the assessment of the interviews, the findings indicate that not many organizations were nicely prepared for the corona crisis and in reality mostly applied responsive methods. The most notable source chain lessons were:
Figure 1. Eight best methods for meals supply chain resilience
For starters, the need to develop the supply chain for versatility and agility. This looks particularly challenging for smaller sized companies: building resilience right into a supply chain takes time and attention in the business, and smaller organizations oftentimes do not have the potential to accomplish that.
Second, it was observed that more interest was necessary on spreading risk and also aiming for risk reduction within the supply chain. For the future, what this means is far more attention should be provided to the way organizations depend on specific countries, customers, and suppliers.
Third, attention is required for explicit prioritization as well as intelligent rationing strategies in cases where demand can’t be met. Explicit prioritization is necessary to keep on to satisfy market expectations but also to increase market shares where competitors miss options. This task isn’t new, however, it’s additionally been underexposed in this problems and was often not a part of preparatory activities.
Fourthly, the corona crisis shows you us that the financial effect of a crisis in addition is determined by the way cooperation in the chain is actually set up. It’s typically unclear precisely how further expenses (and benefits) are actually distributed in a chain, in case at all.
Finally, relative to other functional departments, the businesses and supply chain features are in the driving seat during a crisis. Product development and marketing and advertising activities need to go hand in deep hand with supply chain activities. Regardless of whether the corona pandemic will structurally switch the traditional considerations between generation and logistics on the one hand and marketing on the other hand, the future must tell.
How’s the Dutch meal supply chain coping during the corona crisis?